By accepting you will be accessing a service provided by a third-party external to https://www.fsmetals.com/
In one of our articles in the previous edition of The Five Star Standard, we noted that North Sea crude was rushing to fill demand created by Asia’s oil refiners. Crude exports to Asia from the North Sea are poised to reach a record 12 million barrels in January according to Bloomberg.
Apparently, those crazy Europeans are not the only ones trying to cash in on the Asian Market. According to an article published by Reuters, 3 major oil companies and trading houses are set to ship large volumes of U.S. crude oil to Asia in the coming weeks. Traders have estimated that some 700,000 to 900,000 barrels per day is set to leave the United States in February, with the majority of the cargoes headed to Asia.
That volume would be the highest monthly level on record, according to the U.S. Energy Information Administration, helping reduce a U.S. inventory glut that has continued to pressure prices. The U.S. crude cargoes are bound for China, Japan, and Singapore.
Even the Canadians seem to want to get in the fight for Asian market share. According to reports, some 710,000 barrel cargo will make an unusual journey (the first of its kind, as a matter of fact): it will leave from Eastern Canada, go through the Caribbean, and unload in China. This is scheduled to occur in Mid- to late February according to reports.
Of course, no one wants to lose market share in Asia, so OPEC and Russia are working hard to move as much crude to the region as possible. The Organization of the Petroleum Exporting Countries' (OPEC) oil supplies to Asia rose by 7 percent between November and January, to 17 million bpd, meeting two-thirds of the region's oil consumption. Russia has also re-routed a great chunk of its rising production toward China and the Asia-Pacific over the past decade. Russia surpassed Saudi Arabia as China's biggest supplier last year, exporting 1.05 million bpd of crude versus Saudi Arabia's 1.02 million.
And on a side note, Japan received its first LNG shipment derived from American shale gas in January.
It seems no one wants to be left out of the surging oil demand from Asia. And this makes since. While the United States is certainly the single most important consumer of crude, developing nations are more important to increasing demand. Everyone wants a piece of that action.
By: Ty Chapman
Five Star Metals, Inc.
Raising the Bar for Customer Service and Quality
Follow me on Twitter to get the latest updates throughout the week!